Peterborough and Stamford hospitals trust faces £60m loss

Peterborough and Stamford hospitals foundation trust estimates a deficit of £56m this year, after it failed to receive £22m funding for its private finance initiative (PFI) from the government. The trust had expected to receive the money from the Department of Health following the announcement in February that it was putting aside additional funding of about £1.5bn to support the PFI costs of trusts in England that were struggling with their repayments. Peterborough and Stamford was named as one of the trusts, but has not received the funding for 2011-12. To cover its costs in the interim, the trust has sought up to £46m of temporary public dividend capital funding from the health department. The trust, which has an income of around £220m a year, has now added the £22m sum it expected to its projected deficit for 2011-12. "Although the underlying operational performance of the trust remains as it was described in the previous public board meeting, the retained deficit has increased from £34.3m to £56.3m," said Peter Reading, interim chief executive of Peterborough and Stamford hospitals foundation trust. "This movement reflects the fact that the trust will not now receive the planned PFI structural support of £22m in 2011-12." PFIs allow private companies to fund the building of hospitals and mental health units, while the NHS pays for the facilities over a number of years. The scheme has been heavily criticised for being poor value for money and leaving trusts with major deficits. It can also be difficult for a trust to extricate themselves from a PFI deal once they are locked into a contract. Reading said despite the deficit, the news that short-term funding had been secured was positive. He also said it had achieved another important objective of getting the treasury to acknowledge that there are some trusts with unaffordable PFI payments. Reading took over as interim chief executive in February, replacing Louise Barnett, who had replaced Nik Patten in October 2011. Barnett returns to her role as the trust's director of human resources and organisational development. This article is published by Guardian Professional. Join the healthcare network to receive regular emails and exclusive offers.